More Deep Cuts Ahead for Radio

The recession is over and the motto of radio’s biggest group operators is – let the cutbacks continue.

The radio industry has been cutting back its work force for years.

Technically, you can go back fourteen years to the beginning of consolidation when a handful of acquirers bought their local competitors and put the newly-merged operations in the same building.

Maybe that was tidying up on expenses back then when each station had a receptionist but suddenly only needed one. But over the years consolidators have cut into the bone in their attempt to lose financial weight.

The scene is set.

The time is right.

The sad reality is that the only thing that radio stations can eliminate to further reduce costs is people.

Most groups have gotten wise about how to fire after the uproars that were caused by mass “layoffs”. Even the term “layoff” is a joke since few if any of the dismissed employees have been rehired.

When Clear Channel made firing its staff a major promotional event on Barack Obama’s Inauguration Day in 2009, they got a public relations black eye. Other groups noted the blowback as well. Since then, every major group has continued to thin its ranks – but quietly -- from market to market.

With nothing else but people to sacrifice, you’d think the groups would eventually run out of people to let go.

Not the case.

In fact, with advertising recovering in the sector, radio groups can see profitability from all the downsizing they previously did and their foot is on the accelerator which is why I foresee these deep cuts.

I like “deep tracks” better. But radio has become a cheap operation with no real focus on content or the local listener. I don’t like it. You don’t like it. But that’s the way it is.

Obviously, with the economy coming back, radio groups could start hiring again.

Personalities. News people. Promotional staff. More sales execs.

They could stop having one manager run all stations or in the case of some groups that one manager may not even reside in the local cluster. It’s maddening.

So I want to be wrong about this. I really do. But my best sense is that the following will happen in the year ahead precisely because now the radio recovery is about profit for the failed and sometimes bankrupt consolidators.

For that reason, expect the following:

1. Deep cuts – one PD running as many as seven to ten stations would not surprise me.

2. More absentee PDs like the mistake Citadel is pulling in Washington where Paul Duckworth was let go and WLS PD Drew Hayes got to do double duty from Chicago. We’re talking about big markets here. But never mind. Economies of scale are coming no matter what the market size.

3. With staff vanishing what better time to sit down and squeeze concessions out of surviving employees – talent, managers, directors. Renegotiating employment contracts. Count on it because Clear Channel is getting ready to do it and once Clear Channel does it, you know what the others do.

4. Severance packages offered to employees except the radio version will be a take it or leave it proposition. Say no, you’re out. Say yes, you get to work for less. Whatever happened to severance buyouts? Not in radio.

5. Sit down for this one – pay cuts may be as high as almost 50% of the current base pay. Probably a bit less but basically working more for less – half less. If you are losing me on my math, remember what I said earlier that the groups are smelling a profit and you are it.

6. Sales commissions will get mutilated. It never made sense to cut sales staffs but that never stopped consolidators from doing it. Now, the trend is already established – reduce commissions, take away accounts, make salespeople work harder to make less. Consolidate good existing accounts with one or two people who will earn less commissions.

When?

It will become evident within the next six to eight weeks and continue for the entire year.

Already, companies like Cumulus are being held together with spit from a technical point of view. Not an adequately staffed engineering department. Stories of Cumulus stations getting knocked off the air again and again until a tech can get them back on. Get used to it.

You can’t find many promotional people in radio anymore. If you do, they are spread thin.

And, forget the Internet and mobile Internet. This is a luxury to radio operators who live in their own bubble and insist on operating this wonderful entertainment business like Public Service Electric and Gas.

That’s it.

Radio has become a utility.

And for a moment I want to say what a tragedy it is that many thousands of talented professionals who love this business so much they will even work for incompetent managers are in for another round of pain.

Thousands of you have written to me over the past year to ask, how can these owners do this to local radio?

Your answer is as close as the light switch.

The public utility of radio is a profitable business in spite of the Internet as long as the price is right.

To them the right price is – minimal staff, shared expenses.

The coming cutbacks will not just be by one radio group, but by virtually all.

Deep cuts may threaten radio’s future in a world of so many other listener options, but to consolidators it is the clear – and only – path to profitability.

Would you expect any less from executives who live for the moment because tomorrow means more debt to repay or refinance.

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How To Be More Like Pandora

Years ago one of the major market radio stations I programmed used syndication tapes from Drake Chenault.

Every week at our studios off City Line Avenue near Philadelphia, a master tape arrived from Canoga Park, CA with the new week’s current music tape that we simply slapped on a Schafer automation machine.

But as a young program director I just couldn’t do it anymore.

I knew the owner was cheap – the company would have loved to operate today in the current atmosphere of repeater radio. But I didn’t.

The thing that pushed me over the top was when I heard a song included in the “currents” tape called “Walking My Cat Named Dog” by Norma Tenega. This wasn’t even a one hit wonder (#22 on the national Billboard charts probably with lots of payola).

It was just a wonder.

How the hell did it arrive for Philadelphia airplay?

They had to be kidding!

I called our Drake Chenault contact, a great guy named Lee Bayley and said, "what was this!" No Philly station was playing it. No one even heard of it. A cat in Philly is not necessarily the same thing as a cat in LA if you know what I mean. Is this a Philly sound?

Seems like the syndicator was tracking it from LA and it wound up on the tape. I turned to my trusty associate Mike Anderson and said – get rid of this for me, will you – and he sliced it out – along with the other songs that we knew would lay an egg with local audiences. We were forbidden to do this at that point in time.

I mention this because Pandora has the secret to success in music radio.

Pandora’s almost 50 million subscribers love customized radio partially because the formula Tim Westergren’s successful Internet streaming service employs is learning the tastes of listeners and comparing them to a set of genomes – or conditions that help Pandora suggest other songs they might like.

Meanwhile, back at terrestrial radio, it’s bad enough that 50 million people are in love with Pandora but local stations are doing the “Walking My Cat Named Dog” routine – playing the wrong songs for local listeners.

Radio people and researchers are getting pissy with Pandora these days and they’re doing all the usual things that radio people seem to do when they get mad. Just like the satellite radio days, some radio execs are trying to belittle Pandora as not big enough to present a threat.

That may have worked with satellite radio which was trying to steal terrestrial radio’s listeners – albeit it by asking them to pay for what they could also get for free. But it won’t work with Pandora.

Pandora is a powerful platform and smart radio executives give it the respect it deserves – after all their kids likely listen to it (or they may, also).

So how to compete with something this popular that is growing this fast?

One thing, for sure, don’t play the same music over and over again in an era when audiences clearly have become accustomed to larger playlists.

I know it is heresy for an ex-PD to say run a large playlist – and I’m not exactly saying radio needs to do that – but I am saying terrestrial radio needs to come up with a genome of its own – a local genome.

You and I know smart programmers who could do this.

Look no further than Pandora’s founder for guidance:

Pandora got a group of musicians and music-loving technologists together to assemble hundreds of musical attributes or “gene” into a large Music Genome. Things like “the unique and magical musical identity of a song - everything from melody, harmony and rhythm, to instrumentation, orchestration, arrangement, lyrics, and of course the rich world of singing and vocal harmony.”

Radio programmers could do the same thing for local communities. I am convinced that people like Ron Jacobs, the legendary first PD of KHJ Boss Radio in Los Angeles probably did this in his head. Still, it can be done by others in a more methodical way.

Pandora said:

“It's not about what a band looks like, or what genre they supposedly belong to, or about who buys their records - it's about what each individual song sounds like.

Since we started back in 2000, we've carefully listened to the songs of tens of thousands of different artists - ranging from popular to obscure - and analyzed the musical qualities of each song one attribute at a time. This work continues each and every day as we endeavor to include all the great new stuff coming out of studios, clubs and garages around the world”.

Boy, don’t we radio folks get too obsessed with who is buying music instead of what characteristics local music has that makes local listeners listen?

In other words, Pandora didn’t get to be a brand icon on a straight path upward by just creating yet another playlist. It did it by studying the elements that individuals who subscribe to Pandora when they begin to choose music.

While terrestrial radio cannot do exactly that, it can remove the focus from national one-size-fits-all playlists and start assembling local musical taste attributes that mass audiences in certain localities seem to want.

There are lots of great radio research companies sitting idly by while computerized playlists are ruining the day. Turn a project like this over to them in various local markets and you come away with some of the magic of Pandora.

I’m not talking about mere music testing – that has been around for years and you’ll note Pandora didn’t do music testing either.

Often readers ask me to make positive suggestions on how terrestrial radio can improve and grow audience. Today, I am making yet another one.

Codify the 30 or 40 musical characteristics that apply to your musical genre, the local heartbeat and your target listener.

Don’t try to be Pandora.

Be like Pandora in isolating the local music genome.

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Cumulus Eyes CBS

Cumulus and Lew Dickey sure have a way of making people think that their eyes are bigger than their stomach.

Perhaps you’ve seen the speculation reported by Tom Taylor in Radio-Info recently that Cumulus – through the mirage of its Crestview partneship – is lurking in the distance ready to take several CBS Radio markets off the hands of CBS CEO Les Moonves.

The thinking is Moonves wants to sell clusters in smaller CBS markets and concentrate on the large. Before the recession iced everything, CBS sold off properties in Kansas City, Columbus and Denver.

San Diego, Phoenix, Orlando, Cleveland and Riverside-San Bernardino look like good markets to dump now – if you buy into the current speculation.

And there is a sucker saying he is willing to pay 7 times cash flow for the right properties.

If all of that is true, you will be congratulating that sucker -- Lew Dickey -- on picking up some CBS leftovers soon.

But with a purchase price of 7 times cash flow, most people familiar with these types of deals will tell you – Dickey is spending your money not his.

Why buy when he cannot afford what he currently owns?

Even Larry Wilson didn’t pay those multiples when he picked up four stations from CBS to pair with the two he bought from Paul Allen in Portland.

And you could be forgiven if for a moment you think Lew Dickey will actually overspend by four times to pick up most or all of the CBS markets Moonves wants to move.

On the other hand, Lew Dickey is "The Great Pretender" and he hits on radio companies the way frat brothers hit on women.

Early.

Often.

Except when it comes to acquiring radio stations, Lew Dickey does take no for an answer.

Usually, this kind of talk is all about his ego.

Many present and former Cumulus employees who correspond with me have a story or two about how Lew brags about how he is going to buy Citadel out of bankruptcy and Regent before the company collapses under its debt.

But Citadel is ready to emerge without the help of Dickey and Regent is back in business under the ownership of its debt holders who traded debt for equity.

And where is a company on the ropes like Cumulus going to get the money to overpay for these CBS leftovers?

That’s the genius.

Cumulus is back in the game again with Crestview Partners, the investment bankers who helped them overpay for Susquehanna and wound up saddled with the resulting debt. This new iteration is called Cumulus Radio Investors.

From the day it was announced, Cumulus Media said it would not put any of its money into the new acquisition fund (hello?) and neither would Crestview – yet.

However, your money is welcome.

Who knows, Dickey could actually pull it off.

Buy more stations; get more debt and walk away bigger.

There is something in me, however, that wouldn’t be surprised if Cumulus Radio Investors overpaid to acquire, say, some or all of the available CBS markets and then just happened to turn around and use the rest of the money they would raise under the guise of growing bigger markets to re-fi their own debt.

Look, believe all the happy talk you want about the recession being over for these players but their recovery is a long way off if not out of reach.

For example: Clear Channel is facing some $18 billion in debt payments it must make in a few years. That’s $18 billion with a “b” and the money has to come from somewhere – unless, of course, by the time they run up against their loan covenant they can magically ---

--- refinance again at prevailing rates.

That’s the game these guys like to play. You can’t hit a moving target.

And Cumulus, always an admirer of Clear Channel, could take a page from the same playbook.

That is, buy some stations.

Make some headlines.

Get the focus off of their own debt covenants that they are staring in the face.

And, refinance Cumulus in time to live another day.

This may seem odious to you if you actually care about local radio. The idea of borrowing from Goldman to pay J.P. Morgan Chase – so to speak – is simply creating more debt and refinancing it.

Aah!

That’s why my readers are so smart.

That is exactly the game. Big media groups are just like other companies in this economy. They live to get big, buy debt and refinance it.

Unlike my old Italian father who thought wealth meant paying down your debt, radio’s new class of carpetbaggers would never want to do that.

So, 90’s.

And that’s why it doesn’t really matter if Cumulus actually closes the mythical CBS deals or not. Because the end game is to live another day – get bigger on borrowed money until they can’t do it any more.

And then?

There’s always bankruptcy again.

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CHIN08 - Angela Valid - (1) A ball. The invention of a ball. (2) For the home or for the body

Chinstrap are delighted to present a new piece from Angela Valid:





"Iain Chambers and Alexander Jones have been working under the name Angela Valid since 2002.

At irregular intervals.

Additional, somewhat regular members are often drafted in to collaborate in a live environment.

Their most recent activities include a blah blah blah soundtrack, a session on a radio show, a couple of blah blah blah (Arts Council funded) releases and blah fuckin blah piece for Ergo Phizmiz's Faust Cycle.

More info on the internet (link to something)."



And if that's not exciting enough, look how beautiful these two gentlemen are....




Obviously both liberally sprinkled with finest Layamon's Brut....

The Facebook Meltdown

Social media is on the verge of a meltdown in consumer confidence that could totally redefine its role in traditional and new media.

The crisis stems from recent and increasingly numerous revelations that Facebook, MySpace and even Google have played foot loose and fancy free with privacy issues that turned out to matter to hundreds of millions of social network users.

Facebook was recently outed for giving heretofore thought to be private user data to companies for advertising purposes – even, according to a recent Wall Street Journal article – companies that didn’t ask for the data. MySpace, content sites Livejournal and Digg were also implicated.

The breach in consumer confidence teaches traditional media companies such as radio operators who have been slow to adopt full-fledged social networking that there is both trouble ahead and opportunity.

Facebook is having to backtrack in light of revelations such as their desire to report user data to Google’s DoubleClick and Yahoo!s Right Media.

According to The Journal article:

"Across the Web, it's common for advertisers to receive the address of the page from which a user clicked on an ad. Usually, they receive nothing more about the user than an unintelligible string of letters and numbers that can't be traced back to an individual. With social networking sites, however, those addresses typically include user names that could direct advertisers back to a profile page full of personal information. In some cases, user names are people's real names."

More here.

Congress is up in arms.

Opinion leaders such as techie Leo Laporte have made a big deal of closing their Facebook accounts over privacy concerns and now it has been revealed that a whopping 60% of 1,588 Facebook users polled in a Sophos study are thinking about quitting Facebook over privacy concerns. Some 16% claimed they already stopped using Facebook.

The findings show that those opting out or thinking about leaving Facebook are perplexed with the complicated and sneaky opt-out system Facebook currently employs. If you’ve tried to opt out, you know how difficult it is begging the question -- is that exactly the way Facebook wanted it?

Check out this graphic from the New York Times showing 50 settings and 150 options you'd have to navigate to protect your Facebook privacy.

Now Mark Zuckerberg, Facebook founder under heavy fire, is having to backtrack again as he has done many times in the past when he riles the growing Facebook nation.

Any day now you’ll hear of massive changes before this thing gets out of hand -- if it isn’t already too late. In a recent Washington Post Op-Ed piece, Zuckerberg continues to show that he is clueless at what he did wrong.

You can expect a simplified “master control” to allow for consumers to protect their privacy vis-à-vis Facebook’s advertising ambitions. The new Facebook set up will let users choose from three categories -- everyone, friends of friends or just friends.

It’s too little too late as social network users are clearly spooked.

Social media is such a big thing with the next generation that it is impossible to see the future without factoring in social networking. Yet even young entrepreneurs like Zuckerberg, the Harvard dropout, seem to channel their establishment tendencies and that’s a mistake.

Back to radio.

Radio companies barely have a working knowledge of social networking so they blindly link to Facebook, use Twitter and conduct contests via text messaging. That's what they think is social networking.

Very primitive stuff.

In a way their lack of sophistication may now present an opportunity to go back and learn the lessons MySpace, Facebook and Google, caught recently for intercepting personal data from homes and businesses while sending vans out to take photos for its Street Views service, have not learned.

Social media is key to the mobile Internet.

Even terrestrial radio companies will have to learn to understand social networking.

Here are the lessons as I see them – in shorthand:

1. Break a trust with consumers and you may never win their full confidence back again (watch this play out over the next few months of concern over social media privacy issues).

2. The only way to proceed from day one is to guarantee privacy and put the sharing of consumer information in the hands of the consumer. Start with the assumption that consumers will want to opt out and then make it easy for them to opt in if they like. That's the exact opposite of how Facebook made its mistake.

3. Don’t confuse Facebook, Twitter or the other social networks in and of themselves for social media. They are early to the game but they are not the end game. Real social networking will be when media companies and others build fan bases around content and personalities. I consider my thousands of readers as part of my social network. Facebook is a tool I employ but it is not the only tool I plan to employ over the months and years ahead.

4. Talk to and with your social network base. Rule number one is social networking is two-way talk. If you’re not available for interaction with the fan base, it’s just another form of mass marketing and it will fail.

5. Social networking is not – I repeat – not ever going to become new age direct mail. If you don’t believe me look at what happens when Facebook pisses off its users – 60% think about quitting the site.

Social media addicts are about to teach aggressive marketers what happens when you break a trust and sell out your fan base.

It’s not too late for radio to be on the right side of this critical and pervasive aspect of all communication going forward by building trust in the digital world and then safeguarding it.

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Give the Drummer Some!

Too often in jazz and improvised music we just take the cheap and cheerful route regarding using the drummer as a soloist in our compositions and with our bands. But there's so much more that can be done other than the usual default drum solo options. I've made a few suggestions in an article on my website. You can see it Here


Coming soon - an extensive interview with Steve Coleman on the subject of rhythm. Watch this space...................

The Awesome Power of the Radio Personality

You often hear me lament the shortsightedness of today’s radio CEOs for plundering personality radio in the name of financial budget cutting.

Radio personalities are the one local asset that cannot be duplicated on a web stream or the mobile Internet right now.

It is lunacy to waste them.

And in light of the recent loss of two radio giants, we come to appreciate not only how important personalities are, but the role of the local radio station as well in helping them find their loyal audiences.

I speak of the death of Bill “Wee Willie” Webber of Philadelphia radio fame over the weekend and several months earlier, the loss of Ron Lundy – the WABC and WCBS-FM icon in New York City.

I worked with “Wee Willie” in Philadelphia at WIP and, as you would expect with his career longevity, he was the real deal – nice, engaged, loved his fans and loved his trade. Until his death, Bill Webber was working in Philly radio on smaller stations and the local PBS outlet in recent years but nonetheless at 80 he kept going.

Gerry Wilkinson, Philly Broadcast Pioneers President (and classmate of mine at Temple University) said it best: “Bill used to tell the students at the Broadcast Pioneers Career Nights and Symposiums that the broadcaster loves his craft so much that he'll continue to play his trade to the last breath” – and Webber was doing that”.

I did not personally know Ron Lundy, but because Philadelphia was almost a suburb of New York radio during WABC’s glory days, I felt like I knew him.

Bill Kehlbeck, Sr. VP at the Mahlman Company did a poignant tribute to the consummate radio pro when he talked of the common touch, like Webber, that Lundy had with fans and workers.

Here’s how Kehlbeck put it:

“What stands out in my mind is there were two entrances on our floor that got you to the WCBS/FM on air studios at Black Rock. A lot of newer on air guys slipped through the back door. Not Ron...he entered and walked through each day through the main or "sales entrance." And stopped office to office along the way, loud, joking.... talking it up with everyone and endearing himself to both the rookies and senior sales staff everyday. You looked forward to it!

It was a miracle that Ron made it to the studio in time for his live 9am shift start, as everyone "stopped him" along the way!”

Lundy was an adopted New Yorker (from Florida) and Webber, born in Cuba, settled in Philadelphia, the city he and a lot of other people find difficult to leave.

Webber and Lundy loved radio.

Loved their audiences.

Lived in the cities they loved.

In an era of Repeater Radio, CEOs think it is okay to import outside programs and use technology to create unremarkable voice tracking, but that’s not radio.

In fact – that’s what’s killing radio.

I’ll make this statement flat out. I don’t care if you could only listen to Ron Lundy or Bill Webber on a tin connected with a string from the studio, the hell with technology, you’d listen.

This is not about a call to relive the past nor is it a naive denial that all things – including lives – must come to an end one day.

Just simply a reminder of the awesome power of the radio personality at a time when the industry really needs a wake-up call.

Radio can’t compete with Pandora if what listeners want is customizable music radio.

Can’t compete with the mobile Internet if what listeners want is their own portable iTunes music library on call at a click, swipe or touch.

And it’s even getting harder lately for radio to compete with Blackberry devices, iPhones, iPads and smart phones in delivering information on-demand to the palm of consumers’ hands.

But if you want to be entertained by a person who is living in a local market where the personality is likely raising their family and dealing with everyday life the way you do, then there can never be a digital version of a radio personality.

So we may mourn the death of two great radio personalities here, but part of the radio industry is also dying when new age CEOs have, in their infinite wisdom, found a way to eliminate the one thing that can carry radio on its shoulders for many, many more years to come.

Local personality morning shows deliver up to 50% or more of the total revenue of radio stations.

My friend Dick Carr, the WIP General Manager who employed “Wee Willie” Webber when I was there as a young upstart as well as an entire lineup of legitimate radio personalities could teach radio CEOs a thing or two today.

Personalities are a unique part of the appeal of radio but always in the context of the local radio station. That is, a station without local personalities is just a station waiting to lose audience and a station in need of personalities is waiting to attract its maximum audience.

When some of Carr’s personalities later left the popular and highly rated WIP for more money to defect to a lesser signal and less magical mix of format elements, that station WPEN laid an egg and eventually switched to oldies – with no personalities.

As we appreciate the lives and careers of these two radio personalities – Lundy and Webber – how timely to understand the importance of the local radio station – involved in the community, the source of news, information, entertainment and comfort.

Because without all that, great talents would still be looking for a place to connect with local audiences who eventually loved them in life, missed them when they left the air and mourn them in death.

The secret to radio's financial recovery is not waiting for spot advertisers to come back.

It is bringing personalities back first -- the missing ingredient to an industry turnaround.

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Radio’s Believe It or Not

Over the course of each month, many of my readers have a chance to check in with paranormal radio stories that can be so bizarre that they belong in Ripley's Believe It Or Not.

These are real stories from real radio people about unbelievable things that have actually happened in the radio industry.

To give you a comparison, in the book “The World of Ripley’s Believe It or Not” you read the story of a world champion chicken picker who could catch, kill, cook and eat a chicken in less than two minutes.

Or a woman named Alice Penfold who could lift her sister Mary on a stool using only her teeth.

And there's "Three Ball Charlie" who could put a tennis ball, golf ball and billiards ball in his mouth and still whistle or Liu Ch'ung of China who has double pupils in each eye.

I believe Radio's Believe It Or Not can beat that this month.

Firing a Top Citadel GM Is Positive

40 years with WIVK, Knoxville. Started as a teen. Cranking out an estimated $14 million a year in the market currently as VP/GM – that’s just a mere 60% of all radio ad dollars and Ed Brantley runs into the buzzsaw known as Judy Ellis.

Here’s how an insider tells it:

“In making the announcement Judy (Ellis) told the staff that anyone heard saying anything negative about Citadel will be terminated immediately. I wonder if that is considered negative? I guess that must be positive because if not she’d have to be terminated!”

It’s Not Nice to Fire All Radio’s Personalities

From a Nashville cat:

"WUBL/Atlanta APD/MD Lance Houston moderated the morning Normal People: From The Mouths Of The Consumer session, which surveyed Nashvillians Ashley (15), her mother Karen (40), Billy (22), Kathleen (40) and Jeff (50) and from a Music City suburb, Stephanie (32). Each have iPods and high-speed Internet and Stephanie, Kathleen and Jeff are Sirius XM subscribers. Jeff acknowledged he hasn’t listened to terrestrial radio in nine months, while it has been three years for Stephanie.

Out of the six participants, Karen was the only 100% country fan and she doesn’t purchase music, except for her children. Karen, Billy, Stephanie and Jeff all recognized only one Nashville morning host, with Billy stating he would turn off a DJ if he didn’t like the topic, 'with the exception of Gerry House'.”

I'm told none of the participants could name the AM drive talent on WKDF or WSM-FM.

I’ve said it a million times – the one thing terrestrial radio has that cannot be compromised by an iPad, iPhone, Pandora, WiFi – nothing – is radio personalities with a fan following.

Unfortunately, you may remember that Clear Channel cut the budget for the popular Gerry House Show -- the one average listeners like enough to recall their name forcing the firing of sidekicks and imposing other content cutbacks.

Oops.

The “Clear Channel Emergency Channel”

Recently KYOT right here in my own adopted home market of Phoenix went off the air in afternoon drive.

But instead of tracking smooth jazz (its format) until the technical problems were solved, someone at CentCom switched on the “Clear Channel Emergency Channel” which played rock hits followed after each and every song by a liner telling listeners that they were listening to the "Clear Channel Emergency Channel”.

What’s funnier (or more tragic) is that each liner gave out an 800-number for listeners to call.

Shouldn’t that be the other way around?

Let me get this right, Clear Channel wants listeners to call them and tell them they are off the air?

One commenter said “Dead air would have been a much better choice until whatever problems were resolved”.

No worries.

The People Meter picks up everything even if country programming is actually rock because what this episode shouts from on high is that nobody is listening – not station people or listeners. But thank God PPM doesn’t care what people actually listen to – just that the carrier is back on playing anything at all.

Cumulus Looking for a Few Good PDs with No Experience

To borrow a phrase from "The Rebel" Bill Wright of WIBG fame in Philadelphia, “you heard this rebel right”.

Programming experience not required.

Are we having a trust issue on this item or would you like me to go to the tape?

“Looking for a Morning Host/PD at our 50,000 watt Heritage News Talk 940 WMAC in Macon, GA. The right candidate should have a minimum of 3 years on air experience with programming experience a plus but not required. Please send your aircheck, resume, and references to bobby.reed@cumulus.com. You can also mail your package to the address below. No calls please. Cumulus is an equal opportunity employer”.

That recent hire from Cintas uniform company is licking his chops.

No programming experience required because they won’t be programming. Just carrying repeater radio syndication and voice tracking.

Cumulus just signed on with MTV to carry a new Westwood One “80’s” syndication. See how easy it is to be a Cumulus program director these days?

At Cumulus No Research Is Good Research

A longtime friend reminded me of an alleged scam he said took place at Cumulus stations years ago.

But let me let him tell it:

“Your coverage of Cumulus' corporate allocation charges to stations reminded me of a scam that they ran years ago. It involved money for "market research" that was charged to stations. The stations were never involved with or saw the results of the research but they were paying Lew's former company, Stratford Research. We all assumed they did NO research and that it was just a way to legally scrape more cash into Dickey's back pocket. Looks like history is repeating itself”.

Citadel: You Can't Hire Our Fired.

Did you notice that great line in Tom Taylor’s Radio-Info not too long ago that said it all:

"Citadel doesn't want competitors 'cherry picking' its talent, gets court okay to keep severance packages confidential."

Come again?

Citadel doesn’t want to keep or pay their own talent yet they asked a bankruptcy judge to keep details about all severance packages confidential to avoid competitors from “cherry picking” and hiring their fired employees.

And the court approved it!

Believe it or not.

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Language, not style - it's the imagination, stupid!

Jason Marsalis' recent well publicised rant on Youtube concerning what he sees as the preponderance of 'jazz nerds' destroying jazz with their odd meters, chromatic solos and straight 8s rhythms has started the jazz wars rumbling again. Of course the Marsalis clan are well versed in the politics of the rant and can always be relied upon for some rabble-rousing quotable quotes. But this time it seems the arguments have matured somewhat and instead of a vicious Youtube comment-style backlash, a fair amount of considered debate has been undertaken - which is all to the good. Chris Kelsey in particular had some very good and typically well thought out arguments to make, as had Peter Hum, whose blog brought the whole thing to my attention in the first place.




It really amazes me that people like Marsalis - or whoever his opposite number on the other side of the jazz style wars might be, miss the point so massively when they get into this kind of polemic. The history of jazz is studded with great music that IS great music because the players made it so - not because of the style they were playing in. There are countless examples of jazz musicians making great music out of the flimsiest of material as well as from great compositions. Sonny Rollins is of course one of the great masters of this - he can make great jazz art even from such throwaway ditties as I'm an Old Cowhand or 'I Told Ev'ry Little Star'. For every 'East Broadway Rundown' or 'The Bridge' there was an equal number of St Thomas's and 'Toot Toot Tootsies - Rollins made them all sound great.



Ditto Miles Davis - witness how his bands could elevate such tired repertoire as 'Autumn Leaves' or 'On Green Dolphin Street' into a sublime piece of abstract musical art on the Plugged Nickel recordings. In fact I believe the Plugged Nickel recordings are the ultimate proof that it's the imagination and attitude that you bring to your material that counts, not the material itself. On the Plugged Nickel, Miles' band, often in front of a small (and sometimes audibly drunken), audience work their way through material they must have played hundreds of times, and find extraordinary riches contained therein. They were such great musicians, with such an endless curiosity and freshness of approach that the material - which in the hands of others can often be boring, predictable, and trite - yielded some of the greatest examples of the improviser's art ever recorded. And there are SO many examples of this throughout the history of jazz - what about Coltrane playing 'My Favourite Things'? Lester playing 'Shoe Shine Boy'?

Style is ephemeral, language is not. Sonny Rollins' improvising language is applied to whatever style of piece he chooses to play. What people like Marsalis do is get into massive sweeping statements that miss the point entirely - it doesn't matter whether you play swing or straight 8s, or whether you play standards or original compositions. It doesn't matter whether you play in odd metres or in 4/4. What does matter is how much imagination and creativity you bring to your material.

As a testament to the idea that style means nothing and creativity means everything, here are two examples of wonderful contemporary jazz improvisation, one which would probably fall into Marsalis' 'Jazz Nerd' category, and one which probably wouldn't. I think these examples clearly show that the vehicle you choose to express yourself in is immaterial:

First off here's the French drummer Franck Vaillant brilliantly incorporating Korean music into a straight 8's groove composition in a piece that can only be described as imaginative and joyful.



And here's Matt Wilson's Arts and Crafts playing Monk's 'We See' absolutely straight, no arrangement, no 're-imagining', no 'deconstruction', just great improvising in the swing idiom, over changes, and with everyone refusing to succumb to cliché or by-rote playing. Another example of how the vehicle doesn't matter, it's the approach and imagination that ultimately is the arbiter of whether something is worth doing or not.

Armageddon or Radio's Promised Land

The last battle is coming between good and evil before the day of judgment.

I call it Armageddon Radio.

For years now I have been warning that the radio industry would forever decline if it did not embrace the digital beyond.

Many of you agree.

Radio CEOs do not.

But now even they cannot dodge the mounting evidence that just running on-air stations will not be good enough to sustain a growth industry.

Don’t take my word.

At the recent BIA/Kelsey conference in Jersey City (hooray for that conference site from this Jersey boy), they made breaking news.

According to accounts in Inside Radio, there is “slow growth for radio’s on-air assets, stronger growth for online” and it quotes BIA/Kelsey as saying “the media world has been irreversibly changed for consumers, businesses and media companies”.

Thus, a reallocation of ad dollars.

From terrestrial to online.

Radio and traditional media is still a potent force but online is growing rapidly. The shift that I’ve said is driven by generational considerations is a full blown revolution.

Even Clear Channel, Cumulus and Citadel – the Three Blind Mice – will have to fess up and gear up.

According to Inside Radio, “Total local ad spending for all media will grow from $128.9 billion in 2010 to $144.9 billion by 2014, president Neal Polachek says. Traditional media’s piece will decline during that period while the slice allocated to digital will more than double, from $17.5 billion this year to $36.7 billion in 2014. “

Here’s the scary part, according to Polachek, “If you pull digital out of traditional media, you can see that traditional media is declining over the next five years…”

Digital accounting for 25% of all local advertising by 2014.

Newspapers 13.3% (down from 21.5% in 2009)

Online 13.1% (from 5.4% in 2009).

TV 12.3%.

Radio 10.7% of ad dollars.

Analysts – the few still left standing in radio – are loathe to predict an industry robust enough to even equal where it was before the recession.

As we say in Philly, “who don’t know that”.

The world has changed but radio has basically remained the same.

Radio companies spend next to nothing on interactive enterprises while consumers spend like crazy even during a bad economy to own the latest Apple devices and smart phones.

Radio geniuses play down the importance of Pandora, the heir apparent to music radio, by making the same lame comparisons they used to make when they compared radio to satellite radio – that is, mine (audience) is bigger than yours.

Everybody wants to be Pandora and young and old alike adore it -- about 48 million strong and growing (source: Media Maverick).

So, I’ve warned all this was coming and who would have thought a radio publication as good as Inside Radio would one day have its four top stories about digital issues? That says volumes as well.

The Dark Ages of Consolidation are ending and the Renaissance of Mobile Internet is happening.

Perhaps you saw the Coke “Happiness Machine”Commercial that has had over 2 million views that is indicative of how advertisers will precede radio into new media. Take a look:



One of my readers wrote to remind me the other day that the radio of the future that I often describe is not really radio. And he is correct. It will be different but the skill sets that radio companies have give them the added competitive advantage.

The radio industry wants to operate on the premise that today’s on-demand audiences need 24/7 broadcasting. They cling to that premise and get snarky when challenged.

Yet, look around, young people and even a growing number of older listeners want to be in the driver’s seat backed up by a recent Forbe’s article on “The New Normal: Your Customer Is In The Driver's Seat”.

This is no time to take it personally.

The radio industry will have to adapt.

Perhaps they didn’t like hearing it from me or the handful of others who warned that sociology was on a collision course with technology.

Now, even at their media conferences – the news is the same.

Digital tracking up.

Traditional heading down.

So what is the answer?

I know I am preaching to the converted here, but let’s just preview what radio can and should do to avoid going down with the ship:

1. Bolster local, terrestrial radio. Not voice-tracking or cheap syndicated schemes. Hire personalities. Do local commercials. Please fans. We know how to do this so let’s do it now. Terrestrial radio can be a large chunk of free cash flow that will fund the necessary transition to digital platforms so this is no time to fire talent, do repeater radio and drive willing listeners prematurely away from the mothership.

2. Reread number one.

3. Budget 10% of your operating budget to interactive media as soon as possible. Add a minimum of 5% to that every year if radio is serious about becoming part of the digital revolution. And it had better be because when BIA/Kelsey predicts turbulence ahead, the industry is running out of happy talk upon which to stay the course.

4. Build local interactive hubs around the cities where you have existing stations. Then, get ready to go into markets where you do not have clusters. All of these interactive hubs should be autonomous and local.

5. Read the words “autonomous and local” without anything in your mouth this time so you don’t choke on it.

6. I can name at least ten growth industries for these local hubs – digital publishing is one, local record business is two, new social media connections is three. The other seven will cost you (wink/wink).

7. Pressure the NAB to negotiate special rates for streaming and podcasting in return for a fair and easy to swallow performance tax on terrestrial radio. I don’t think radio should have to pay this tax, as you know, but radio is going to lose the battle in Congress in the years ahead. Use what they want to get what radio needs – a preferential arrangement to make music podcasting and non-terrestrial radio streaming affordable.

8. Talk radio is aging – there is a way for radio to lead the next “talk” revolution that isn’t built around politics, three or four hour shows or even listener call in. The next generation gets its talk radio on by interacting in social media. Hell, you do it when you go to a Radio-Info message board. Radio companies should build it and they will come.

9. Brainstorm for the iPad – that is the entertainment device of at least the next ten years. Everything you do should be optimized for iPad and by that I do not mean offering apps to access existing content. In the future, if you can find 10,000 people who will pay $25 a year to hear a jazz expert do a one-hour jazz show each day, then you have generated $250,000 a year in subscriptions alone. As you know I am working on the pay model with a bright developer and I believe pay is the way.

10. Then do 10 more of number 9 and bring in $2.5 million in niche programming revenue to add to your improved terrestrial radio free cash flow. Now are you liking the mobile Internet?

11. Get into TV. Not ABC or Fox type TV. Or even YouTube. If you’re with me on the importance of building content for the iPad, imagine the video shows you could professionally do each week with sponsors that could put you in the television business without having to have the expenses of our friends across the street.

I’m just warming up but I wanted you to see what I mean when I say – improve terrestrial radio so it can keep cranking out free cash flow to fund the fundamental change in consumer preferences for new media.

Coke may have found its “Happiness Machine”.

But yours is likely to be an iPad, Ford Sync or similar device the nature of which consumers cannot get enough.

My message to the radio industry: Don’t whine or pout.

Attack!

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Citadel: Life After Bankruptcy

What a world this is when radio companies file for bankruptcy, turn shareholder investments into worthless paper and then, with the blessing of a judge, start all over again as if nothing happened.

I recently saw Tom Friedman, The New York Times columnist and bestselling author on Charlie Rose the other night.

Friedman said that we have now entered an era when politicians for the first time in history will be taking things away from their constituents rather than giving something to them.

Friedman’s comments made me think about the radio industry.

For years Clear Channel, the largest radio group, didn’t miss an opportunity to tell the world that less is more. Turned out John Hogan was a man ahead of his time and now Tom Friedman confirms it (wink/wink).

I’ve also been using the end of Citadel bankruptcy to up my meds.

After all, you know what is going to happen.

It may be a new beginning for a flawed management team but the hundreds of employees who were fired are not going to be recalled. Tom Friedman would not be surprised to learn that the radio industry has entered an era where we now take things back from our listeners instead of give them more.

There is no shortage of evidence that most larger radio operators have taken back local radio. Almost every major company uses voice tracking to save on the already low, low cost of live djs.

News has been reduced to virtually nothing -- outsourced by stations to a traffic, news and weather service in exchange for short spots.

Weather emergencies now mean listeners in many meteorological hot spots are now on their own. We’ve gotten conflicting reports about radio’s service to the citizens of Nashville during the recent floods, but last year serious weather events often were left unreported.

Advertisers now get less for more money on radio. Perhaps you saw the recent Inside Radio headline reporting how spot prices across the board have increased. Yet commercials are cranked out, recorded somewhere and jammed into long clusters that for the life of me questions how smart media buyers and advertisers really are. No one is even listening to that poor sucker whose spot is in the middle or at the end.

Now, Citadel is set to emerge from bankruptcy and wait until you see what is in store for the little engine that couldn't now that it got away with stiffing some creditors and wiping out all public shareholders.

The game Citadel, Clear Channel and Cumulus is playing is to take away programming and marketing elements that used to be critical to local radio success where in the past station operators would give listeners and advertisers more to win their loyalty.

This phenomenon is happening because in our modern world there are no consequences.

An oil spill that threatens to ruin the Gulf states and other areas – no problem, no consequences. A few days profit will pay any fines.

Wall Street banking abuses. Don’t worry, no one is looking. The CEOs of offending investment banks are not likely to be punished and business goes on as usual without sufficient oversight.

Greece’s economy threatens to take down Europe and maybe adversely affect the United States. Don’t worry. Be happy.

I mention all of this because those of you who, like me, lament the loss of talented managers, programmers, sales professionals and air personalities are asking how all this could be happening to an industry so rock solid that you’d almost have to set out to wreck it to ruin radio.

Well …

Very soon Citadel will join Regent with a brand new lease on life. But don’t expect these born again bankrupt operators to significantly give listeners and advertisers more.

In fact, what you can expect is -- more of less. And you’ve got my name on this piece so I’m putting it out there.

These newly revived radio companies will run things on the cheap again and will continue to invest pennies on the dollar (if that) to build digital platforms. In other words, with the biggest digital revolution in progress, radio operators will find a way to give their listeners and advertisers less of the digital content they keep demonstrating they want.

But enough of Citadel.

What a great opportunity to let them play Wall Street buyout games while others actually buck the tide.

If you’re competing against, Cumulus, Citadel or Clear Channel, ramp up the local news.

Be live more than 80% of the time.

Retire voice tracking.

Rehire talent, management and sales people.

Put personalities that audiences love back on the air.

Build digital platforms for radio-created content realizing that to do this takes adding a line item to the operating budget.

Promote, market and deliver.

The big joke is that with all the trade accounts of how radio companies are outperforming last year’s numbers, the punch line is last year’s losses were of epic proportion.

Once again, no consequences.

A radio company can report a 4% increase in first quarter revenue and make it sound like a turnaround. Forget that the numbers are compared to horrendous performance a year ago same quarter.

Citadel may look to some like a conquering hero when it soon emerges from bankruptcy, but it represents all that is bad that happened to radio since consolidation.

Weak management.

Over leveraged debt.

Taking away instead of giving more.

Analysts say the radio industry is many years – if ever – from returning to its pre-recession revenue statistics. For an industry that could have been a leader in digital programming, marketing and content by now, it doesn’t bode well.

Radio doesn’t need Citadel to emerge from bankruptcy.

It needs the industry to emerge from operating with no consequences and that is about to change.

Until radio stations start giving listeners and advertisers more of what they have long proven they want and need – to borrow a phrase from Friedman – not only will the world be flat, but so will their future growth.

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Comcast’s Breakthrough iPad App

If you need evidence as to why Apple’s iPad is going to change the media world, look at what Comcast just announced.

An app.

A very special app that turns your iPad into more than just a television remote.

Take a moment to see Comcast CEO Brian Roberts explain why a TV/cable remote is a thing of the past. Watch here.

So there it is – pairing the iPad to the Comcast cable box. Easy for them to do and much less expensive than being in the hardware business.

The iPad keyboard is the killer app because Comcast customers will soon be able to search 70,000 on demand shows just by typing a few letters onto their iPads.

The iPad then controls the TV, changes channels, adjusts volume and has a social networking aspect – one user can invite another Comcast subscriber via iPad to watch the same TV show.

Roberts says the iPad “liberates us from the cable box and puts it in the power of the consumer”.

A long way from the days when Milton Shapp and his electronics company developed the Jerrold cable box – one of the first devices in the early days of cable (Jerrold was Shapp’s middle name and Shapp eventually became governor of Pennsylvania).

It doesn’t stop there.

Apple, as I have warned (and I am a shareholder) stands to become a dominant power not only in electronics, which it arguably is already, but in content which it is fast becoming. And unlike what we do, Apple doesn’t have to spend any money on content development.

They act as a gatekeeper to allow third party content providers access to their cool and intuitive devices.

They get to charge "tolls" to content providers for using their "turnpike".

And other companies are embracing the iPad.

Take Livio’s new iPhone/iPod Touch radio app made especially for listening in cars.

Large button pre-sets for ease of use while driving. The app suggests listening options (a modern day “scan”). It zeros in on similar stations, if that’s what the driver wants. GPS can be used to find links to local stations while driving.

In the early days of broadcasting, companies like RCA may have manufactured radios and televisions as well as owned interest in broadcast stations but it was nothing compared to what Apple is pulling off today.

Apple owns access.

RCA had to give access to competing stations for free.

Therefore, unless and until another electronics company can come up with a serious competitor for Apple apps and products, Apple becomes the de facto gatekeeper.

Book publishers and newspaper moguls are worried about all this power in the hands of Steve Jobs and the potential for eating into their profits. But they have no alternative currently.

Record labels continue to fall flat on their faces adapting to new Internet and mobile devices. They are now stonewalling Apple on using recorded music for Apple’s new cloud-based and Lala-inspired streaming service which is due soon.

It sticks in the labels’ craw that Jobs now runs their business and that they in fact gave him the keys to their companies when he played to their piracy fears when pitching iTunes/iPod as a Napster killer. Now the labels have no choice but to play nice and yet they continue to go off the planet.

RIAA has won the initial phase of its lawsuit against LimeWire and in the process is opening the door to hundreds of other alternative services that will fulfill the public obsession with sharing music files. This could be worse for the labels than dealing with one entity such as LimeWire. Details on the labels “victory” are here.

Look to radio.

The industry has not adapted to Apple apps other than to create players that will allow consumers to listen to terrestrial radio or get minor content from cash-pinched stations.

In other words, Comcast can use an iPad to replace the cable remote and call that a success, but radio stations that use apps to allow for radio listening on mobile/Internet devices are failures for doing the same thing.

Well, not quite.

Radio could be a potent force in content and could make iPhones, iPads and iPods natural delivery systems for new content not currently on their terrestrial signals.

But broadcasters continue to insist that radio be consumed the way they need it (or want it) to be used instead of the way that best cooperates with the inevitable.

And what is the inevitable?

Look around.

I was at Glee Live Saturday night when the TV-inspired production company came to Phoenix. From mid theater you see the consumer telling you (if not begging you) to make content for the way they live now.

Phones everywhere. Pictures at the concert taken and transmitted immediately to Facebook pages everywhere.

Apple has done more than any company to dictate the future of the entertainment business without providing one single bit of content that they have to pay to produce.

In fact, they use content from third party sources and profit from it.

Like it or not, you’ll be attending sporting events some day and participating in the play by voting on whether the umpire’s call at first base was right or wrong. See the replay and then decide. Of course, the fans don't get the final say, but talk about social networking!

Then they will meet other fans in the stadium. Stay connected after the game.

Attend shows that are built to have content you can have in your lap on an iPad that enhances the traditional stage only presentation. Of course, you’ll be prompted to buy things while enjoying the show.

And in radio, 100 podcasts per locality and music services that are narrated by experts – unique and compelling. News available by zip code with GPS news alerts that come to you while you walk through the streets.

If I’m a broadcast company, I’m calling a brainstorming session. Turning the best minds loose and having them develop content for the new gold standard in broadcasting.

The Apple iPad with all its apps replaces broadcast transmitters and towers.

We may not like it, but it is starting to happen now.

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Social Media Changes to Watch

The radio and music businesses used to be so simple.

Give the audience what they want and they'll come back for more.

Since the Internet, the mobile generation and the many alternate choices for entertainment available at a touch, swipe or click, these industries radio need to go back to school on social media changes.

Steve Jobs is the expert on reading his young consumer base. It doesn't matter that he is a baby boomer or that his tactics seem to be more old school than new age. But when it comes to understanding how consumers prefer to use new technology, he's the professor.

Still, there is hope which is why I want to run a few social media changes by you this morning to stimulate thought on how traditional media can come away with a better understanding of what consumers want them to do before they expend time, effort and money doing the opposite.

44% of all Americans Own an iPhone, iPod or MP3 Player

The Edison Research findings from a study of 1,753 people ages 12 and up.

Some 54% of them have used these types of devices with their car stereo and that is major. The 44% figure could actually be higher in my estimation but taken as presented nearly half of all Americans have the enemy to radio in their hands and cars.

The car is the main delivery point for terrestrial radio and it is being invaded by popular youth alternatives such as the Ford Sync entertainment system and hard drive, WiFi -- the better to listen to Pandora and other ways to access mobile content that is not traditional radio.

Pioneer is building a Pandora radio for car installation and no matter what the chattering class says to disparage Pandora, it is the gold standard for "radio" going forward.

Soon 50 million Pandora listeners (and growing) will be able to seamlessly access their favorite customized radio service as a built-in device. For everyone else, there will be apps and WiFi.

Conclusion: A car is no longer the sacred home of terrestrial radio and offering only a traditional radio station and nothing new or innovative in content will leave radio out of the hunt for what to listen to on wheels with the next generation.

48% of Americans Have At Least One Social Networking Profile

That's up from 34% in a study just one year earlier.

The Edison/Arbitron findings also reveal 30% of these folks check their profiles more than once a day (up from 18%).

Social networking is a bugaboo for radio companies who tend to blindly embrace Twitter and Facebook and turn social networking into direct marketing. That would be a mistake as I see it. Social networking is so named because there is a two-way communications component presumed in the description.

With so many people gravitating to social networking while traditional media grapples to make their new communications tool their new marketing tool, you can see trouble ahead.

Conclusion: Radio stations must either commit to direct and meaningful communication with social networking profiles or eliminate the direct mail approach. In the new age, you engage listeners who engage you because you are communicating with them. For stations not willing to staff up to interact with growing social media audiences, they will be considered a nuisance and will have missed a golden opportunity to connect.

The iPad Accounts For 5% of All Mobile Net Consumption

And that figure was revealed only one week after the device came out. Keep in mind the following charts are from early April when hardly any iPads were in the hands of consumers compared to today. Check out the growth potential for the iPad here.

Hitting 5% of mobile web consumption after only the first full day of use underscores the growth for not only the device itself but content accessed on it.

Conclusion: Radio has to step up and think visually with new products that are beyond just audio. The day has arrived when consumers will direct their entertainment using the iPad in their hands.

Radio may want to keep delivering only terrestrial streams, but with a consumer item that promises to be more prolific than perhaps any other electronic device that proceeded it, that would be shortsighted.

Get to the skunk works.

Break the mold.

Start inventing content that will be enhanced and embraced on the entertainment centers of the future -- the iPad and mobile Internet.

Now Consumers Will Start To Shut YOU Off

Seth Godin did a piece recently in which he confessed to getting tough with his incoming email and social networking messages.

Godin said:

"Two years ago, I started taking a lot of flak for being choosy about which incoming media I was willing to embrace. What I've recently seen is that this is a choice that's gaining momentum.

It's your day, and you get to decide, not the cloud. I could go on and on about this, but I know you've got email to check..."

As usual an interesting early warning from his intriguing mind. Godin is saying what many of us are thinking -- and that includes young people overwhelmed by social networking -- that the "enough is enough" phase has arrived.

Important because entertainment and information providers generally assume that they can get access to consumers through Facebook, Twitter, email and other content at a click of send. But if Godin is right -- and I believe he's onto something -- we'll be seeing a retreat from the deluge of messages and input that we receive digitally.

Conclusion: The repercussions could be great. Even as some industries like radio and records are trying to use social communication as today's direct mail, consumers have to protect themselves from the barrage of sheer content. What this says to me -- and I'd like you to mull this point as well -- is that we may have to start raising (or for that matter even establishing) standards for what we communicate to others.

It may be a cheap way to get the word out. Now what the "word" is apparently will matter more.

Mobile Bullying Is on the Rise

Look at these statistics from i-Safe.org:

• 42% of children are bullied online (25% more then once).
• 35% of children are threatened online (20% more then once).
• 58% 'admit' to receiving online messages which are hurtful and threatening (33% more then once).
• 60% do not inform their parents.
  

Even as content providers struggle to learn about the electronics of the next generation, it is becoming apparent that other problems -- some that may lead to legal liability -- are showing themselves.

I am told that "schools are hesitant to react because there's no firm national blueprint in place, and they are quick to cite 'other factors' because they don't want to assume liability".

Yet, we are beginning to see what I am sure will not be isolated examples of mobile bullying.

Eleven year old Tyler Lee of Chatsworth, GA was bullied about his "sexual orientation" although he had Aspergers Disease. Phoebe Prince moved to Massachusetts a year ago and 'picked the wrong' boyfriend. Parents find themselves helpless monitoring the activities of their children in the wide world of mobile/Internet. Eleven year old Jaheem Harris who was bullied starting in the 5th grade. There are '11' year old children who are hanging themselves over this.

Media companies looking to get into the mobile space can keep these things in mind when designing content that may be heard by young people. But, new and traditional media can speak out now using their existing resources to talk to parents and even students who will listen.

Conclusion: Radio to the rescue again. This is a perfect new age public service campaign that deserves leaders to stand up and act. Bullying tactics tend to center around sexual identity, discrimination and religion among other things. Children are even bullied for their disabilities.

For stations or content providers who want to step up now, here's how:

"Tell your parents or reach out to a trusted adult. Avoid online messages from bullies. If it's school related, inform them immediately as most schools are working on solutions and policies. Keep the message-they may be needed to take action. Protect yourself-never agree to meet with anyone you meet online. If bullied through chat, instant message 'block the bully.' If threatened with harm, notify the police".

The once simple process of entertaining and informing via traditional media has become more challenging and worrisome as technology helps enable a new generation to make different choices.

I hope some of these "Gen Trends" (and comments) are useful to you in decision making, working with teams and protecting your franchises.

My rule of thumb:

Open your eyes to how consumers use technology and act appropriately.

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Cumulus Intern Abuse Allegations

The charmed career of Cumulus CEO Lew Dickey may have hit a big bump in the road.

Several current and former Cumulus employees have told Robert Ottinger, the attorney leading a separate employment class action suit against Cumulus for what Ottinger terms “internship abuses”.

Ottinger says that the Cumulus internship program is guilty of four violations:

1. The internship program is not similar to training that would be given in an educational environment.

2. The internship experience is not for the benefit of the intern.

3. The interns DO displace regular employees and does not work under the close supervision of existing staff.

4. The employer that provides the training does derive immediate advantage from the activities of the intern.

Even one of the above violations is enough to invalidate the internship program - therefore requiring Cumulus to pay all of its interns for the time they work and any overtime in the opinion of Ottinger, an employment law specialist.

Although a decision has not been made yet to file an action against Cumulus for intern abuse, Ottinger is looking for anyone who has information on the Cumulus internship program. No fees are required to join such an action. (Ottinger can be reached at (866) 571-5010 or Robert@ottingerlaw.com).

The general complaint is that some interns are not paid for their work and are made to do standard everyday office work assisting in clerical tasks entering information into data bases, filing documents, coordinating events, calling radio promotion contestants and preparing documents for sales managers etc. and answering phones as well as manning the front desk - nothing education or training oriented - just working as employees for free.

Some employees, according to Ottinger, say that Cumulus has hundreds of interns working in these capacities around the country and that they are rarely supervised and are instead told to perform a task and only see managers to get new orders.

If true and a legal action follows, Cumulus would be shut off from presumably firing people to save money only to have unpaid interns pick up the slack.

Ottinger says, “Basically, Cumulus is violating Fact Sheet 71 in many ways and the interns have the right to be paid for their work and are not being paid for the work”. Here is Ottinger’s blog “Know Your Rights to Your Pay” which you may find helpful.

The Dickeys, who are also suing several managers who left their employ, will likely be spending a lot of time and money on court issues this year.

For example, Ottinger’s firm was contacted recently by a Cumulus manager who believes that Cumulus does not pay its female managers as much as it pays its male managers.

She alleges that Cumulus management is male-oriented with few high ranking female managers and those that do exist are paid less then men – that’s the culture at Cumulus, she adds.

According to Ottinger, “….I also spoke to Cumulus salesman who said that he was fired because he was taking time off to care for his aged and sick mother. We get calls all the time from Cumulus people with sad stories. We are working to help them whenever we think we can help.”

Meanwhile, Ottinger is in the midst of a class action suit against Cumulus in California that looks promising for employees who allegedly were not paid for their overtime work. If successful, everyone who was affected by the Cumulus pay policies in effect at the time, will receive compensation even if they were not a part of the suit.

The class action has been moved from State Court to Federal Court in San Francisco.

Cumulus also filed an answer denying any liability.

There is a Case Management Conference set for July 14th that will be the parties first appearance before the federal judge. First, both parties are required to discuss settlement and alternate dispute resolution such as mediation.

Federal court is good for this case which should move along quickly.

Cumulus certainly will have plenty of time to see what is at stake. Usually the parties settle and agree to a gag order that prevents them from discussing the terms of the settlement.

That is, when they have to pay up, Cumulus could then posture like they did nothing wrong, admit nothing even while they pay back wages and other damages a court may find. Nonetheless, lots of Cumulus employees in the California class action could be receiving a late pay day for previous abuses.

Of all the radio consolidators, Cumulus has appeared to wage a holy war against its people. But they are not alone.

Pressing employees while the economy was bad and jobs were hard to find and allegedly forcing them to sign questionable non-competes just to get a few weeks severance pay after they were fired.

While Cumulus is no Bonneville, generally considered the most employee-friendly radio company, it has been very aggressive in clamping down on employees, piling on the work and playing hardball with their careers.

The Dickeys, in my opinion, are seemingly oblivious to the human relations aspects of running a company.

It’s Lew’s way or the highway.

John Dickey is “other” brother who tows the company line.

Gary Pizzati a henchman -- he’s not well liked from what I hear.

I would not be surprised to hear that the Cumulus class action suit got settled in private for millions of dollars while Dickey strikes an Alfred E. Newman “What Me Worry” pose.

I also wouldn't be surprised to see at least one major sexual harassment case against Cumulus – a company some employees think is run like radio’s version of Animal House.

And if enough interns come forward and the case develops, Cumulus could have another embarrassment on their hands.

I’m not even counting the Kristin Okesson case in Bridgeport, CT where Dickey has apparently gotten his feelings hurt because Okesson left him for Cox. He’s suing Okesson, a very capable market manager, good and plenty and she’s uncovering shoddy contractual work by Cumulus that may blow up in the Dickeys faces before the case is settled.

And, while Dickey reaps what he has sowed …

CBS is looking up.

Cox is generating a fast recovery.

Bonneville never missed a beat.

Lincoln Financial is still the most desired company that consolidators would like to get their hands on and ruin.

Saga is posting nice revenues in small to medium markets.

The recession may be ending, but thanks to the stupidity of mean-spirited radio groups, the recovery is in full stride -- for employment attorneys.

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Another Study Vindicates Filesharing

Steve Meyer, who as I have often said is the smartest observer of the record industry, knocked my eyes out in a recent issue of his publication Disc & DAT (Digital Audio Technology).

Yet another study that exonerates filesharing as the culprit in today’s music industry.

It’s a lack of innovation -- not filesharing – that’s the conclusion.

I’m sure that doesn’t come as a surprise to you, but it may be to the record labels who are acting like it is 1999.

Professor Nico van Eijk of the University of Amsterdam conducted the latest study and his conclusion speaks volumes:

"The entertainment industry will have to work actively towards innovation on all fronts. New models worth developing, for example, are those that seek to achieve commercial diversification or that match supply and end-user needs more closely. In such a context, criminalizing large parts of the population makes no sense. Enforcement should focus on large scale and/or commercial upload activities. . . Introducing new protective measures does not seem the right way to go..."

In other words, filesharers are consuming all media especially concerts, films and games – not just copyrighted music.

I've linked to the 55-page report here.

Let me comment on a few of the findings my friend Steve Meyer highlighted:

“The study concludes (among other things) there "isn't a clear relationship" between the decline in sales and file sharing, while also finding that fear of evolution prevented the recording industry from adequately adapting their business models to the broadband age. While the recording industry is having problems, argues van Eijk, it has less to do with file sharing, and more to do with the fact they've been "abstaining from innovation" -- as the study phrases it”.

Think about it.

The labels could have bought Napster, not annihilated it, thus avoiding creation of the Napster vacuum that was promptly filled by bit torrent sites, etc.

The labels could have innovated along with Steve Jobs when the Apple CEO caught them off guard with his offer to help stop piracy. That offer was the iPod and iTunes store. He played to their fears. They allowed him to become the de facto Big Kahuna of the Record Industry.

They could have laid off streamers and come up with an easy to swallow royalty payment schedule that would have grown music consumption instead of dampened it.

Could have launched its own cloud.

Could have done Pandora itself as an industry consortium – that is, if they could have gotten along together for a minute. Bet Steve Jobs would have loved to own Pandora. Bet he still does.

More from the report:

"Turnover in the recorded music industry is in decline, but only part of this decline can be attributed to file sharing. Conversely, only a small fraction of the content exchanged through file sharing networks comes at the expense of industry turnover. This renders the overall welfare effects of file sharing robustly positive."

Innovation scares the record industry.

God forbid, they had a new idea other than CDs.

If record labels had to run the space program, they would find themselves doing a soft landing in Camden, New Jersey instead of the moon because they cannot figure out which way is up.

Now, record labels really need to know which way is out.

Because Steve Jobs is running their show.

Setting the rates, making the new age “record players” if you will. For all practical purposes, he’s eliminated the album (although you wouldn’t know that by Lady Gaga).

Apple is about ready to launch cloud-based instant access to iPods, iPads and iPhones – while record labels can brag about instant access to – well, suing people. And, by the way, the labels are opposing Apple's iTunes "cloud", too as witnessed by this recent article in The Wall Street Journal.

So expect the RIAA to raise a commotion and argue the latest study that looks at filesharing as the lesser of evils.

The worst being – a lack of music industry innovation.

As Meyer pointed out in his piece, Steve Jobs says "Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations."

That’s a great quote -- not that Jobs ever admits a mistake (like in the current version of Apple TV).

Still wisdom of the quote is right on.

And Steve Meyer wrote this in 2003 when he launched his newsletter:

"Any software programmer will tell you the hard core (ugly) truth is this: anything that can be encoded digitally can be decoded and replicated with a little work. It's time the labels recognize this fact, accept it, and now spend time brainstorming on how new revenue streams can be created within the framework of all the technology at hand."

Okay, so don’t admit to past mistakes. We understand.

But, wake up and look around.

My USC students used to be split about whether filesharing was stealing. They had many excuses – some good (“I use it to preview what to buy”) and some bad (“the money never gets to the artists anyway”). I’ve often wondered about these rationalizations.

But there is no denying that one could also look at filesharing as today’s radio.

A source of music discovery.

And now we have yet another carefully considered report that explains the phenomenon if not the unfortunate response of the record industry.

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